How Much Should Premiums Vary?
All bills would eliminate gender differences, although women now pay between 4% and 48% more than men.
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All bills would eliminate gender differences, although women now pay between 4% and 48% more than men.
The young people are going to get soaked.
The left wing of the Democratic Party wants everyone to pay the same premium, regardless of expected costs.
That’s actually good news– I had assumed the Senate would use the House ratio.
Young people could be made whole by a tax credit at least equal to the difference between their premiums and their actuarial cost.
Of course then the hit will be to taxpayers as a whole instead of to young people, but we all seem to have accepted this already. The “we” meaning anyone who has already embraced any sort of health care tax credit or deduction.
On Ken’s point, it’s hard to understnd why the left is so intent on punishing the young and the healthy — who certainly have less income and fewer assets than older, less healthy people.
Any time people are prohibited from paying an actuarially fair premium, lots of bad things are goin to happen, as explained in Dr. Goodman’s Monday Health Alert.
Liberals are fond of saying “health coverage will only be affordable when everyone has coverage.” What they really mean is health coverage will be less expensive for middle-aged people when younger people are forced to subsidize the coverage of middle-aged people.
There is a new WellPoint study that predicts premiums for the young and healthy will triple under Obama Care. See the study here. http://www.wellpoint.com/newsroom/stats_facts.asp
And today’s Wall Street Journal editorial on the study here.
http://online.wsj.com/article/SB10001424052748703567204574499034177212064.html
Premium differences due to gender rating are only immediately obvious in the individual market. It’s not apparent in the group market. However, when the federal government mandated maternity coverage in group plans, women bore the cost through lower money wages [J. Gruber, “The Incidence of Mandated Maternity Benefits,” American Economic Review, v. 84, n. 3 (June 1994), pp. 622-641]. The naive analytical response to abolishing gender rating is to expect that it simply raises premiums for males, but I suspect that it is hard to shift all the costs in this fashion. I suspect that insurers also respond by reducing their offers to women, by running ads on ESPN instead of Hallmark Channel, for example. I also suspect that the costs of maternity would be much lower if the federal government had not mandated coverage. I understand that health insurance always covered costs in the case of a difficult childbirth, but not one without incident. Because childbirth should be a planned event, that should not be insured anyway, so the previous standard was correct.
John Graham is making a very interesting point: When women think they are getting something for free through insurance regulation, they end up paying for the benefit with less take home pay.
Something else to note is that delivering babies is one of the few areas covered by third party payment in which it is possible to call a hospital, or a doctor, and get a package price.
Perhaps this is because so many individual policies don’t cover maternity care and people have access to alternatives, like home delivery, if the hospitals aren’t willing to compete.